New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1887-02-20
CAN SPECULATION BE TAXEDl
WHAT COTTON EXCHANGE BROKERS SAY.

LETTER. FROM STOCK EXCHANGE OFFICERs-How A
TAX COULD BE EvADED.
Senators vclder and Traphagen of the Senate Com
mitiee on Taxation yesterday continued at No. 81
Nassaust the investigation into proposed methods oil
taxation in New-York. w. g. Moller asked to De
allowed to make statement in contradiction of the
report that he the author of the bll which sen
ator Vedier introduced in tn Legislature TAXING
hrokers salrs Mr.. Mocr positively denied that nc
had ANYTHING do with the bill and he was opposen
TO IT, 49, -.
oaye an accol of tie origin oil that exchange anu
toid hnw IN his Judgment Mr. Vedders bill, II u pe-
cane a law, would drive the cotton business away
from NewYork Cable orders for cotton ior ,n'u re
delivery he said, had to be executed promptly ana re-
turns made by cable. broker was compelled 10 ueas
in futures in this way and 1t led TO the formation Oh
the exchange. Commission merchants advanced Oh
cTon. and urected themselves by selling for delivery
in October or November. N the same way meicnah.'
advanced guano to the planters and protected mem
selves by these future sales Merchants formerly bought
cotton and held il for a rise i the market, paying
storage Interest etc II the cotton went down, as he
had known TO do in 1907, from ~ To 10 cents TUG
merchant would be ruined But now the merchant
could hedge if he Jaw the market going down. anu
save himself from heavy loss. IL had he said. put an
end TO violent fluctuations in the cotton market
Tbroueb the medium of the Cotton Exchange New
York had become tho cotton centre OF the worlo;;
Orders were received here from all over the worid anu
the New-York market governed ,he price OF cotton
In the year in which the exchange was started lS'o'
there were 800, 600 bales Of cotton sold IN new
York Last year the exchange sales ran up 10
o. 600 900 bales The total product o. the country
Was 6 300 600 bales. Since the exchange started IN
1870 there had been 90 O000 900 bales OF cotton sou
in it, Before she New-Orleans was the cotton
centre Desperate efforts were being made To get inc
bushes back there. the NcwOfleans Exchnge exert
ing every means to that.end IL was hard TO Keep to
business in New-York IL had been falling on nei n
but he could not tell why. The tax proposed ny lne
Vedder bill he said. would have cost the rIchhnee
So 900 600 since IL started. II coGd not bear tnal
or any other tax. The broker now gets 81 on every
Chairman Vedder remarked that il merchant
hedged and thus saved himself from loss soneDouy
Mr. Moore said that was true, but II was
distributed so to cause the least INJURY.
lie declared that il was a mistake to SUPPOSE
that the brokers were making money. Az RUE
he said they worse Oh now than they were hVe
wears ago. The expenses OF doing business IN New
York in rents, clerk hire ETC. he snd, were yer,
heavy The witness tald that person who thought
n stock was too high priced and who sold 1t short ne
hevng that il going down. was in hie OPINION no
more of n speculator than the man who bought the
stock thinking that it would 90 up. lie said that 1t
was impossible to draw bill in regard TO dea ing IN
futures that would discriminate between legitimate
and necessary business transactions aud mere specu-
lation. All business was more or less speculation.
Henry lientz, another member of the Cotton TX
change sad that 300 900 bales OF cotton had been on
storage in New-York that this business all grew ont
of the exchange helped the city and the State and
a Ia. on sales would drive the business away Ger;
tificates Cf membership in the exchange had ocched
from 50 800 TO ) 900.
j. H. Parker. another cotton broker ,ad the clause
in the Vedder bill requiring written contracts for each
Transaction would shut up the exchange as II would
practically prohibit business. He said that New York
WAS not a natural cot market and the business
could only be done here because of s general advnnt
age the business and financial centre of the county
4 tax OF any kind on sales would outweigh that al
vantage.
Ex-senator Bixby was heard in regard to the eS-
emption OF the property OF the Bloomngdae Insane
Asylum from TAXATION This real estate, he SAID, was
valued at over - 900 900 and consisted OF OIS lots
II not used Tor charitable purposes as the Zio
llearh o.t
of maintaining patients IN the cit, asynms was rot
over sl24. The hoominSdale Asylum was high
priced hotel for llnatcs This property was not ohv
exempt iron taxation but six streets were closed ~ A.
The improvement of other pro- criy IN the nci-hbor
hood was prevented and the taXablo value OF other
property decreased .
said the BUoming dao Asylum had nn income OF
p2jO,0OO and expended fSoOOO. lie thought II
great wrong that Its real estate should be exempt from
Taxation and the streets closed ioi its benefit. Mr.
Olmstcad also complained that small trlst estates
taxed ON their tu value AVID one-ha The income
taken in this compelling many orphans and poor
people great hardships. whils wealthy oprroratons
sue ~ lite insurance companies escaped altogether
Tie following letter VIA received by the chairman;
re" aon s s,e. Kat, ~ Y,s YorE
DIR ss. Afier careful consideration. md II inpo'si.
action. In .eeurte i ths ioowing re soa ant ~ 81 e.
enable your Honorable committee To fully appreciate ihc
Gh, and mpl OF ioe points arrs.g we s
they are derived namely
sale without exception the ,ransaeon "a nnAy
contaminated NJ actual deuucrg 81 sfcHT.itcI
roisrN
OF order cannot he a-eefiarei at Tho
time OF It's receipt dealer the broker hen,c tho i'm
p1-ing upoa the 0haon because Of to spee"iare
~ Is imlo-s bl- OF enforcement
To delivery of securities sOd doe. not In iisrf reveal
81 the trurarton aud dealer broker
main forever ignorant Thereof
g. II VIII always mpns able 10 distinguish between
called legitimate and geei1rs sale- where actual de
made before contract.
which s the universal rule and Practice at e New York
Stock Exchange
l. ~ the not conclusive, submit
the ioncsy be- ovaded hy tha
sellers providing himself VITA scturucs before making balci
and The rcfurc,
Incacnabe injury and injustice would result TO the lie
holder OF scurc- who h. deprived of
troll Of hs property By reason 81 hpptccaon ant Is
qurnty compelled 10 delay delivery thereof T. future
day well To all bona tdc holders ~ scsrrcs reading
abroad who compel To sell fO future delivery by
thereof.
We Thus submit these brof wiring believing
contain all The elements 81 logic thai
duced showing the utter possibility OF distinguishing be-
sooaed speculative and other sales and
queDt inability to submit 10 Honorable COMMITTEE tho
Of bill which would have for IT'S object deriving
from tai speculative transactions marie at tho
NCw-lvTk oOck Exchange.
We trust tlai this will obyate the person
ally appearing before yOui but shall hold ourselves In
readiness 10 promptly oby the request OF committee
Respectfully submitted.
JANIS ID. SMITH, prcSdent.
NtDoLrH kIrrLEn. Wee President